The Bank of England kept rates at a record low, as new figures showed that the
UK's trade gap with the rest of the world widened unexpectedly in October.

The Monetary Policy Committee's nine members kept the base rate at 0.5pc for another month and held off from further quantitative easing - buying assets to pump money into the economy - to leave the programme at the £200bn level.

Their decision to maintain the status quo, widely expected after policymakers have stuck to a tactic of "wait and see" over the recovery's strength, came as hopes fell that a better balance of imports and exports will keep boosting growth.

The trade deficit in goods grew to £8.5bn in October from the previous month’s revised figure of £8.4bn, according to the Office for National Statistics, rather than shrinking to £8.1bn as analysts expected.

The gap widened as imports increased 3.4pc on the previous month to reach £31.6bn, a record high driven by UK businesses buying in more chemicals from Europe.

Exports could not keep up with the size of the rise, even though they grew 4.1pc to £23.1bn, the most since May 2006 and in line with encouraging data from manufacturers in recent weeks which shows demand picking up.

“The widening of the trade deficit in October is an early blow to hopes that net trade can make another healthy positive contribution to GDP growth in the fourth quarter,” said Howard Archer, economist at IHS Global Insight.

Net trade made up half of the UK’s 0.8pc gross domestic product (GDP) growth in the previous quarter, its biggest contribution since the end of 2008. (The balance of trade can make a positive contribution even if exports still outstrip imports, so long as the deficit, or gap, between the two improves.)

The latest increase in imports could be seen as good news about demand picking up at home, economists said, while some suggested it was a temporary phenomenon due to firms rebuilding the stocks depleted during the recession.

Chris Williamson, chief economist at Markit, said: “Once stocks have returned to normal, manufacturers will be on a better footing to sustain rising output and exports, helping net trade to contribute positively to economic growth.”

However, Stuart Green, economist at HSBC, warned that the figures flagged up “the tendency for both imports and exports to rise in tandem … constraining the degree to which net trade can directly contribute”.

There were also concerns that October's improvement in exports was driven by a sharp swing from September's £1bn oil trade deficit to a £250m surplus, partly because summer maintenance work on the North Sea oil fields ended.

Recent data on exports has been strong, with factories reporting that December saw the strongest overseas demand for years, according to a monthly survey from the Confederation of British Industry (CBI).

The weak pound is supporting exports, although possible threats loom ahead, such as the debt crisis in the eurozone and slower global growth.

The total trade deficit, which includes the more volatiles services figures as well as goods, was £3.9bn, compared to September’s three-month low of £3.8bn. The UK's exports of services normally outstrip imports.

The Bank of England's base rate has now been at just 0.5pc since March 2009, while the quantitative easing programme has been at the £200bn level since November last year.